We assign a fundamental rating of 4 out of 10 to AVTR. AVTR was compared to 58 industry peers in the Life Sciences Tools & Services industry. There are concerns on the financial health of AVTR while its profitability can be described as average. AVTR has a bad growth rate and is valued cheaply.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year AVTR was profitable.
AVTR had a positive operating cash flow in the past year.
In the past 5 years AVTR has always been profitable.
Each year in the past 5 years AVTR had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of -0.70%, AVTR is doing good in the industry, outperforming 62.07% of the companies in the same industry.
Looking at the Return On Equity, with a value of -1.48%, AVTR is in the better half of the industry, outperforming 62.07% of the companies in the same industry.
AVTR has a Return On Invested Capital of 4.80%. This is in the better half of the industry: AVTR outperforms 70.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AVTR is significantly below the industry average of 13.29%.

		Industry Rank	Sector Rank
ROA	-0.7%
ROE	-1.48%
ROIC	4.8%

ROA(3y)4.42%

ROA(5y)3.49%

ROE(3y)10.57%

ROE(5y)9.15%

ROIC(3y)6.58%

ROIC(5y)6.55%

1.3 Margins

AVTR's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 9.18%, AVTR is in the better half of the industry, outperforming 67.24% of the companies in the same industry.
In the last couple of years the Operating Margin of AVTR has grown nicely.
AVTR has a Gross Margin of 33.13%. This is in the lower half of the industry: AVTR underperforms 67.24% of its industry peers.
AVTR's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	9.18%
PM (TTM)	N/A
GM	33.13%

OM growth 3Y-7.05%

OM growth 5Y2.19%

PM growth 3Y15.1%

PM growth 5YN/A

GM growth 3Y-0.28%

GM growth 5Y1.11%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

AVTR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AVTR has been increased compared to 1 year ago.
AVTR has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AVTR has an improved debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.79, we must say that AVTR is in the distress zone and has some risk of bankruptcy.
AVTR has a Altman-Z score of 1.79. This is comparable to the rest of the industry: AVTR outperforms 43.10% of its industry peers.
The Debt to FCF ratio of AVTR is 7.37, which is on the high side as it means it would take AVTR, 7.37 years of fcf income to pay off all of its debts.
AVTR's Debt to FCF ratio of 7.37 is fine compared to the rest of the industry. AVTR outperforms 60.34% of its industry peers.
A Debt/Equity ratio of 0.65 indicates that AVTR is somewhat dependend on debt financing.
The Debt to Equity ratio of AVTR (0.65) is worse than 74.14% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.65
Debt/FCF	7.37
Altman-Z	1.79

ROIC/WACC0.46

WACC10.35%

2.3 Liquidity

AVTR has a Current Ratio of 1.49. This is a normal value and indicates that AVTR is financially healthy and should not expect problems in meeting its short term obligations.
AVTR has a Current ratio of 1.49. This is in the lower half of the industry: AVTR underperforms 75.86% of its industry peers.
AVTR has a Quick Ratio of 1.49. This is a bad value and indicates that AVTR is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of AVTR (0.96) is worse than 81.03% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.49
Quick Ratio	0.96

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AVTR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.04%.
Measured over the past years, AVTR shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -10.82% on average per year.
AVTR shows a decrease in Revenue. In the last year, the revenue decreased by -3.59%.
Measured over the past years, AVTR shows a small growth in Revenue. The Revenue has been growing by 2.35% on average per year.

EPS 1Y (TTM)-2.04%

EPS 3Y-10.82%

EPS 5YN/A

EPS Q2Q%-15.38%

Revenue 1Y (TTM)-3.59%

Revenue growth 3Y-2.8%

Revenue growth 5Y2.35%

Sales Q2Q%-5.28%

3.2 Future

The Earnings Per Share is expected to grow by 5.40% on average over the next years.
AVTR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.67% yearly.

EPS Next Y-8.21%

EPS Next 2Y-4.13%

EPS Next 3Y0.83%

EPS Next 5Y5.4%

Revenue Next Year-4.15%

Revenue Next 2Y-2.09%

Revenue Next 3Y-0.25%

Revenue Next 5Y1.67%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

AVTR is valuated correctly with a Price/Earnings ratio of 12.28.
Based on the Price/Earnings ratio, AVTR is valued cheaper than 98.28% of the companies in the same industry.
AVTR is valuated cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 12.83, the valuation of AVTR can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AVTR indicates a rather cheap valuation: AVTR is cheaper than 98.28% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of AVTR to the average of the S&P500 Index (25.98), we can say AVTR is valued rather cheaply.

		Industry Rank	Sector Rank
PE	12.28
Fwd PE	12.83

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AVTR indicates a rather cheap valuation: AVTR is cheaper than 96.55% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AVTR indicates a rather cheap valuation: AVTR is cheaper than 94.83% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	15.35
EV/EBITDA	11.52

4.3 Compensation for Growth

AVTR has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-4.13%

EPS Next 3Y0.83%

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5. Dividend

5.1 Amount

AVTR does not give a dividend.

		Industry Rank	Sector Rank
Dividend Yield	0%

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AVANTOR INC / AVTR FAQ

What is the ChartMill fundamental rating of AVANTOR INC (AVTR) stock?

ChartMill assigns a fundamental rating of 4 / 10 to AVTR.

What is the valuation status for AVTR stock?

ChartMill assigns a valuation rating of 7 / 10 to AVANTOR INC (AVTR). This can be considered as Undervalued.

What is the profitability of AVTR stock?

AVANTOR INC (AVTR) has a profitability rating of 6 / 10.

What is the expected EPS growth for AVANTOR INC (AVTR) stock?

The Earnings per Share (EPS) of AVANTOR INC (AVTR) is expected to decline by -8.21% in the next year.

How sustainable is the dividend of AVANTOR INC (AVTR) stock?

The dividend rating of AVANTOR INC (AVTR) is 0 / 10 and the dividend payout ratio is 0%.